Blockchain is a young technology, but it has the potential to disrupt the way business is traditionally done. In terms of the advantages it can offer the travel industry, stability and security rank very high.
The 2017 Gartner Hype Cycle for Emerging Technologies categorised blockchain as being in the ‘Peak of Inflated Expectations’. But is this true for the travel industry? At Travelport, our architects have been investigating the implications of blockchain, both for our business and for the wider travel sector.
In an industry which is already built on trust, where strong relationships exist and which is working well to manage complexities, we started with an important question: Is there a role for blockchain? To get to the bottom of this, we’ve been analysing the suitability of blockchain to manage on-boarding and management of travel content for secure distribution and selling. We have also been considering other potential use cases for the technology within our sector in Africa.
Mobile is a key differentiator for Africa – a global front runner in mobile technology usage. But apart from online booking for South Africa domestic travel, take-up of technology within travel programmes is poor. And although blockchain-based currencies like Bitcoin are disadvantaged when it comes to payment processing time, financial and technology companies like Mastercard are warming up to cryto-currency.
The financial giant recently announced it will be opening up access to its blockchain technology via its API published on Mastercard Developers, and aims to make Bitcoin transactions possible on credit cards, providing flexibility for travellers and travel partners alike.
Architects predict that in the short term most blockchain developments will happen in closed supplier groups on private and permissioned chains within the travel industry. In the mid-to-long term we may see payments, inventory and order management disrupted by blockchain or distributed ledger technologies.
Whole trip management on blockchain, air settlement and combining of air supplier journeys we see as a longer-term opportunity, anticipating further evolution within blockchain technology. The evolution of open standards around travel blockchains and the willingness of travel suppliers to offer or sell content on a distributed ledger will drive advancements in these areas.
The main impact of blockchain and distributed ledger technologies, however, will be a reduction in processing times and efficiency improvements for any process where multiple parties must share and agree the same information. Examples include invoicing, settlement, moving of payments, contract negotiation and identity verification.
Travelport customers currently undertake many of these activities using manual processes with multiple checks and verification steps. A distributed ledger secured by blockchain would ensure that all parties agree on a single version of the truth in real time cutting out many of the existing processes.